Protectionism And Free Trade In America

2094 words - 8 pages


The argument regarding protectionism and free trade in America can be traced back to our Founding Fathers. The first significant legislation passed by the First congress in 1789 and signed into law by President Washington on July Fourth was a protectionist tariff that provided for over 90 percent of the revenues to operate the new government and encouraged the building of industries and development of family farms. In contrast, Benjamin Franklin, who understood the danger of trade restrictions said, “No nation is ever ruined by free trade.” The argument has continued throughout history and is a major issue in current politics. To better understand this argument I turned to our most valuable resource, history, and as a result have found free trade with all nations to be the only correct policy for United States government. Tariffs should only be used to fund the necessary functions of government. (Ideally I feel there should be no tariffs or excise taxes.) .”
Prior to ratification of the Constitution, states had their own development policies. Delegates from the states sent to Constitutional Convention in 1787 put high priority on solving problems of interstate trade amongst states. Delegates chose to eliminate trade barriers between states. This allowed the division of labor to develop freely, thereby greatly increasing productivity. Despite our government’s insight into the benefits of free trade amongst states, protectionist ideals were still passed.
Trade restrictions on foreign products, also known as protective tariffs, were used by Alexander Hamilton during George Washington’s presidency. James Madison agreed with Secretary of Treasury Hamilton, with the belief that imposing protective tariffs such as the Tariff of 1816 would allow American producers to compete with their lower-priced foreign competitors. Acceptance of Hamilton's pro-industrial, anti-agricultural, anti-British foreign policy led to a series of international trade barriers, like the Embargo Act and the Non-Intercourse Act, extreme protectionist measures. Beginning with the tariff of 1816 these measures led to the Tariff of Abominations in 1828 that pitted the agricultural South against the industrial North. South Carolina led the way in nullifying the Tariff Acts of 1828 and 1832, and threatened secession of the national government.
Just as the states were forbidden to manage interstate commerce, the national government should have been forbidden to manage international commerce.
Protectionists argue that by raising tariffs on imports; foreign producers will be forced to raise the prices of exported goods, thus making it easier for domestic producers to compete. Although this seems like a reasonable action, history has shown us that American consumers are the ones who pay for our government’s good intentions. Tariffs, quotas and other trade barriers artificially raise the cost of foreign goods but they also increase the price that consumers must pay. I hold an opinion...

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